Financial Products "Sold" by Financial Advisors

"If you have a hammer, everything looks like a nail." ~ proverb popularized by Abraham Maslow

I have learned this also applies to many financial advisors, who earn money based on the product they recommend.

If a advisor selling a specific financial product, then that is the number one personal finance recommendation he is likely to make.  Insurance financial advisors tend to recommend insurance products.  Brokerage financial advisors tend to recommend stock and bond products.  Mutual fund advisors tend to recommend their own mutual funds.  Secondary offering advisors tend to recommend their offerings.  Tax advisors tend to recommend investment that minimize tax liability.

While it is legitimate for an advisor recommend a financial product for which he is compensated, I feel I need to do more diligence before accepting the recommendation.   I do more independent research on the product to decide.    In most of the cases, I decide not the invest.  Examples include: Private Credit, Indexed ETFs, Opportunity Zone Real Estate and most Life Insurance based products.   They may be right for some people but not for me.

Some options that I have used include but not currently:  Actively managed separate accounts. I like the idea of have individual stocks in my own account.   However, I've  recently moved away from this option.

Currently, I'm considering a robo investment platform offered by one the brokerages.  I expect the advisor that recommended may get compensated.  That's OK since I am doing an independent evaluation of the product on my own.

For more on Reflections and Musings check back every Saturday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Investment Fees Analysis

This is a follow up to my post on Sunday, September 14: Checking Mutual Fund and ETF Expenses.

Keeping investment expenses low is one good way to increase one's investment returns.  Typically, there are management fees, operational fees (12b-1), and load (commission to seller) fees.  Here's the types of investments and the range of fees in one account we have:

	Yearly Fees
Type of Investment	Management	Operational 12b-1	One Time Load        Front End
Stocks	0%	0%	0%
Bonds	0%	0%	0%
ETFs	0.03-0.77%	0%	0%
Mutual Funds	0.4 -1.5%	0-0.25%	0 - 5.75%

  

The lowest cost option is 0% if one owns individual stocks and bonds since no commission is charged.  This requires the investor to research and choose their own stocks and bonds.  The next level are ETF fees.   Most index ETFs have fees below 0.2%.  The higher fees are usually associated with actively managed ETFs.  The highest level of fees is for mutual funds.  In addition to management fees, mutual fund sometimes charge operational fees, known as 12b-1, for marketing and shareholder service costs. Some mutual funds also have initial "load" charges, which are typically 3-5% of the purchase price, as a one time fee, which is sometimes waived for brokerage clients.

Yes, we have some high fee mutual funds, but we also have some low fee stocks, bonds and ETFs.  To determine the fees on the entire account, I calculated the proportional management and 12b-1 fee of all the investments in stocks, bonds, mutual funds and ETFs.  The effective fee for all the investments was 0.38%, which is the total fee since load fees are waived for clients of this brokerage.  0.38% per $10,000 is a $38 fee per $10,000 invested, which I consider a reasonable annual investment fee for the entire account. 

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Changing My Expectation of Financial Advisors

In the beginning, I looked for financial advisors to offer me products that I couldn't get on my own or products that I wasn't aware of yet.  The first brokerage financial advisor I worked with gave me access to stock investment firms at a significantly reduced cost, 1% of AUM instead of 3% AUM if I went there on my own.  This enabled me to invest with well known investment firms at much lower costs and much lower initial investment amounts.  Some of the major brokerage firms have followed with this model, and some also offer doing privileged internal recommendation. 

Other non-brokerage investment advisors offered different products such as annuities, guaranteed index ETFs,  and other similar products.  Many of these products I evaluated and didn't have much interest either because of fees or risks.

In most cases, financial advisors have developed their own "standard" methodology that they advocate.  I understand the reason for doing that.  It gives them focus on specific expertise and scale for their business for providing financial services.  However, many times the methodology is limited in financial scope or services.

I now have a new expectation of financial advisors.   I want an advisor to tailor their services and recommendations to my specific situation.  I still want them to present investment opportunities that I am not aware of.  However, I want them to be able to enable management of our investments as I would do them.   I also want to do this at reasonably low cost and without committing the majority of our funds to be under the direction.

I started search for "Financial Concierge" on Google.  Most the response were vague about depth of services provided and didn't provide any costs or required funds to be undermanagement.  None shared the cost of such services.  The information sounded like the services and costs for people with much more funds than us.

Luckily, I did come across one brokerage firm that claim to have such services and offers a free consultation.  Since I already have funds at the firm, I plan to schedule an appointment with them to discuss what is offered and the costs.

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial nor advisor advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC